In light of the recent buzz about blockchain on Chinese social channels and the stock markets with interest in companies associated with the technology, Liu Xin, of The Point with Liu Xin on China Global Television Network, hosted Henry Cao and Patrick Dai to discuss the phenomenon. Henry Cao, Professor of Finance at the Cheung Keung Graduate School of Business, and Patrick Dai, founder of the Qtum Foundation, both spoke to their expertise.
Professor Cao highlighted that two key components of blockchain make it unique, its distributed ledger and decentralized organizational structure.
Patrick Dai went over blockchain technologies potential to be the trust infrastructure of tomorrow and power many applications. Blockchain technology moves away from the world of asymmetric information to one of decentralization and transparency. This is why blockchain technology is being used in supply chains, to monetize the Internet of Things, and to build a more efficient payment system for the banks.
Professor Cao noted that the financial industry will be challenged since it is built on trust and with blockchain technology we don’t need brand name institutions to facilitate our payments. In the future, most transactions that take place on Wall Street today will take place on the blockchain, but this transition takes time.
The host, Liu Xin, shifted the conversation towards concerns over blockchain fever.
Dai stated that this fever is part of a natural process, and it’s similar to what we saw with the internet bubble. Dai expressed his concern that the government has been addressing to curb the risk of laypeople since the technology is in its early stages.
Professor Cao said that “Regulation is very important because we noticed that bitcoin has been used for people to do tax evasion, to do money laundering. There’s some intrinsic problems with bitcoin. It’s very slow, it can only do 6–7 transactions in a second, and that needs to be improved.”
“The government has to impose some regulation on this technology,” Professor Cao added. The government will want people to use real identities on blockchain and for coins to have real applications.
Professor Cao also said that bitcoins recent volatility is not surprising considering the technology is so new. But he did express op it will become less volatile once the market gets closer to one trillion dollars in value.
Liu Xin then addressed that the rise in interest because of changing prices will also attract governments to take a stance and asked Patrick to elaborate on his vision of the future of cryptocurrencies.
In which Patrick mentioned that more governments and more governments are becoming aware of blockchain technology. In countries like Japan and in Europe, governments are giving licenses and even recognizing bitcoin as money. But there needs to be an international regulatory framework, like a sandbox so that companies can operate lawfully.
Patrick stated that the biggest challenge the industry faces is that we need more regulation and education, and we will need five years to get there and reach mass adoption.
Professor Cao followed by telling the audience what will be needed in the future, such as cheaper, faster transactions, technology that can scale and tackle real-world problems, financing for companies, supply chain tracking and other applications we aren’t aware of today.
Blockchain technology is at the tip of the iceberg for what it can bring to us.
Watch the interview below.
